Apple wouldn’t have to get anywhere near 50% market share to tip the market. They would need to get enough market presence to break the back of Microsoft.

Once the market tips, and there is an open playing field where Apple, Microsoft and even Linux compete equally based on merits. If Microsoft stops being the default option, and if Apple takes the entire premium market. The that will leave very little for Microsoft. If Microsoft is relegated to bargain-priced PCs, then the OEM will squeeze Microsoft margins, because there is not enough profit in that sector to maintain Microsoft revenues.

Remember,and I keep coming back to it, Microsoft gets crazy amounts of revenue from the business side. So if Apple can make a successful entry in business, the results would be devastating for Microsoft.

You wouldn’t need to take away much share from Microsoft, just the most profitable sales. Basically, repeat Apples success at home in the business sector.

Once Microsoft’s margins start deteriorating and their revenue starts to drop, that would be the market tipping point.

Microsoft might have to get into the hardware business, like they did with Zune, in order to stay in the game. Attacks from Mac and Linux could change the dynamics of their market so much that Microsoft would have to adapt just to survive. Once you take away the monopoly default status of Windows and Office, the slide could be very quick indeed. Microsoft would have to compete the strength, or rather lack thereof, of their products. It would be a hard ride for Microsoft.

But this is all dependent on Apple breaking in to the business market. It could be with Mac OS X Dells or it could be with IBM reselling Apples. The latter makes more sense for me, if Steve can put it together.

Apple has the 8-10% of the PC market. This basically includes most of the premium PC market. If Apple can get another 8-10% but mostly from the premium end of the business sector, would be enough to change all of the dynamics across the entire PC industry. First, it would be devastating to Microsoft. It may force Microsoft in radical changes in their business model.

Apple doesn’t need most of the market, just the most profitable bits. The Microsoft mythology is damaged. It would likely not be able to withstand a properly orchestrated and well-organized assault on the business sector market. Apple can go in and take the best sectors and leave Microsoft to fight with Linux for the bargain-hunters.

That is the reason for the $300M ad campaign. To delay the inevitable.

I just about fell out of my chair with the remark about Richards!

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I do recall those ads where they have a setting and some animator drew in white chalk marks all around to show just where you can go with your imagination or even with a lot of hard work. They were fine but I hated them simply because I hate all things M$, which my therapist used to say I was “projecting” anger onto M$. Then he walked into an Apple Store, played around for half an hour or so, and walked out with a MB. The next counseling session, he told me that perhaps his initial diagnosis of my hatred of M$ was perhaps due to other more material reasons. He said he’d had the BSOD once too often and made the switch. This was during those ads.

Which brings me to Justin Long and his “smug” perception. I’m pretty sure this comes from the reputation for smugness of some Mac users. I will take the blame for that one. No one is better at smugness than me. I’m just that good.

I remember the Win95 ad blitz, but only because the Rolling Stones at first told Gates to bugger off. MS simply upped the licensing fee enough to pay for several more rounds of relapse/rehab for Keith Richards.

I don’t like the new MS ads at all. But I did like the polar bear. Can’t we use Macs to save them?

You asked your readers:

“Quick, name a Microsoft ad campaign. You probably can’t…… ”

and no-one answered, except for the poor guy who mentioned the Rolling Stones song “Start Me Up”, which Microsoft used to herald the introduction of Windows 95, which brought in the dreaded Start Button, and you gave him shit because it was so last century, plus or minus a few years.

I do remember that there was a series of Microsoft ads about “where do you want to go today?” Or was it “what do you want to be today”?

I didn’t particularly get the point then, but if there was one, it was that computers help you do things, and that Microsoft was there too.

Anyway, brilliant analysis, great that you get so many people talking. Just a pity that some of them are not quite up to your level. Try not to let them upset you.

Seriously Dan, if I was running your website, certain people (and they probably do not know who they are) would be fish food by know. I appreciate your patience in responding to them point-by-point, but why not just zap their entire existence?

I do agree with your basic point, that Microsoft’s recent advertising sales have not helped their corporate image, and that if any of the advertising was directed against Apple , it has had the opposite effect.

So, what can we expect from the next Microsoft anti-Apple ads?

I remember about 5 years ago, I was waiting for a bus and saw an iPod add, clearly aimed at teenagers. And I remember this feeling of understanding and awe. Apple’s strategy was a very long term one.

At the time Apple also had education discounts and deals with the education sector both in the US and several places in Europe. They were clearly targeting the kids, but for 2 reasons, firstly to introduce Apple to the parents, second to ensure they had a costumer base in the next generation of empowered costumers, those going to college now.

The other end of the strategy was crystal clear with the MBA, clearly targeted to the CEO’s and alike in companies. They had seen their kids raving about Apple products, and many of them were already using them at home.

As said in your post Jobs stated that people are saying why cannot I have this ease of use at work. CEO’s take decisions in companies, workers are starting to demand a usable operating system, and the new generation of workers graduating in the last few years will push even further the change.

Then, the stopper is the cost of changing infrastructure, which is not negligible. Apple will start leasing computers to small companies. No need to have up-front capital, test drive the equipment if you want. After 2 years of this approach, seeing the reduction in IT staff costs, the capital investment to switch completely will be small compared to staff costs. Larger companies will follow.

How do I know Apple will lease equipment, because they sent me an e-mail with such an offer, “for a limited time only”. It looks like a pilot programme to test the waters.

I think the tipping point is very close.

I went back and listened to the CNBC interview a second time. When asked about Apple’s momentum in Mac sales and reaching the 2 million per quarter milestone and Apple’s sustained impressive Mac sales growth, Steve Jobs said,
“Well, I think people have finally looked at the Mac and said this is a viable alternative to Windows. And we’ve reached a tipping point where a lot of people are starting to feel that way. The other interesting thing that’s happening is that people used to buy a computer for home because they used it at work. But now, there’s enough momentum of Mac in the home that people are starting to say why can’t I use this easy to use computer at work too.”

It will be easier to discern the actual tipping point, when looking back at all these events from an historical perspective. My alternative theory that I’ve been considering and that Steve feels very strongly about is that the higher velocity of Mac sales (that the interviewer’s question referenced) can be seen as a sign of the tipping point having been reached.

I’ve admitted that we’ve reached many tipping points in the non-business market. I’m very interested in the second part of Steve’s comment. How does the Mac break the barriers of entry to high and irreversible corporate/business Mac sales?

So the tipping point would be a moment where the changes are so dramatic that it would seem that it could not go back.”

Tell you what: The day Apple surpasses 50% marketshare in units sold in the US, will be the day MS sues for monopoly abuse.

At your family level, owning your first Mac was a tipping point for your family, yes. But that is not a tipping point for the universe, or even the global or US use of Macs. You’re only looking at a micro level and everyone is interested of a macro level tipping point.

I worded Jobs mention of the approaching tipping point a bit sloppy. I said, “But Steve Jobs did recently say that we were at a tipping point.” I meant to say, ” Jobs recently said we’re approaching a tipping point.”

I would even say that the US college student market has tipped. I would even say that the premium retail computer market has tipped, over $1,000 laptops and desktops.

The velocity of Mac growth over the last couple of years is much greater than historical levels, that is the year over year growth of Macs at 30%-50% every quarter is higher than in previous years.

All of these realities are setting us up for a tipping point. We’ll need an event or policy change or something to send us over the edge to the point of no return.

I think we can tip only when the Mac become an acceptable alternative for most businesses. We need an inspirational or game-changing event.

That’s why I went into so much detail giving examples of possible tipping scenarios. For example, it could be as simple as IBM starts selling Macs to its’ business customers, causing Mac sales to double overnight, and still continuing to grow.

We need a precipitating event, that can take advantage of a world that is increasingly primed for a tipping point.

I highly recommend Malcolm Gladwell’s “The Tipping Point” I was a good quick read.